Activity across the UK’s private sector contracted in the first weeks of November, amid a slump in business optimism and in the period following the Budget.

The S&P Global flash UK composite purchasing managers’ index (PMI) reported a reading of 49.9 for November, down from 51.8 in October and a 13-month low.

It came in behind expectations of economists, who had pencilled in a reading of 51.8 for the latest survey.

The flash figures are based on preliminary data. Any score below 50 indicates that activity is contracting, while any score above means it is growing.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “The first survey on the health of the economy after the Budget makes for gloomy reading.

“Businesses have reported falling output for the first time in just over a year while employment has now been cut for two consecutive months.

“Although only marginal, the downturns in output and hiring represent marked contrasts to the robust growth rates seen back in the summer and are accompanied by deepening concern about prospects for the year ahead.

“Business optimism has slumped sharply since the general election, dropping further in November to hit the lowest since late 2022.

“Companies are giving a clear ‘thumbs down’ to the policies announced in the Budget, especially the planned increase in employers’ national insurance contributions.”